Wednesday, December 12, 2001

Defendant Who Ran Irvington Document Mill Sentenced to 37 Months in Prison

A Middlesex County, New Jersey man who ran a document mill out of an Irvington storefront was sentenced to 37 months in prison and ordered to pay $411,527 in restitution on charges that he produced and sold fraudulent documents to help others to illegally receive federal housing subsidies and commit other fraud, U.S. Attorney Robert J. Cleary announced.

Abudu John Igein, 41, of Fords, New Jersey pleaded guilty on January 3, 2001 to four counts of a 17-count Second Superseding Indictment returned July 25, 2000. Igein pleaded guilty to conspiracy; possession of five or more fraudulent identification documents; mail fraud in connection with federally subsidized housing; and mail fraud in connection with a mortgage loan application, according to Assistant U.S. Attorney Nicholas S. Acker.

U.S. District Judge William G. Bassler sentenced Igein. Judge Bassler continued Igein‘s bail, which includes an order of home detention, pending a voluntary surrender date to be determined by the Bureau of Prisons.

Igein ran the Irvington storefront, which he held out to be legitimate business and employer. In fact, according to the Indictment, the business was a front for a multi-purpose criminal operation involved in the creation of fraudulent identification documents, such as Social Security cards, birth certificates and drivers licenses, as well as pay stubs and other documents. The documents were purchased and used by buyers to qualify for federal Housing and Urban Development rent subsidies.

According to statements made in court, defendant Igein and his co-conspirator, Kehinde Musilu Ayinde, 43, of New York, committed a variety frauds at Power Electronics over a period of several years, including Section 8 housing fraud, identity theft, credit card fraud, bank loan fraud, bank check fraud and insurance fraud.

Igein was arrested on Feb. 17, 1999, along with approximately 20 present or former recipients of federally subsidized housing in Newark and East Orange, most of whom obtained their documents from Igein, Acker said. With three other housing recipients who were charged separately in April and November 1999, a total of 25 individuals were charged.

Under the terms of a stipulation between the Government and Igein, the amount of the loss for purposes of the U.S. Sentencing Guidelines was more than $800,000 but not more than $1,500,000, according to Acker.

Of the approximately 23 recipients of federally housing subsidies who were charged in the related cases, 21 have pleaded guilty to theft of government funds; one case is pending; and one defendant is a fugitive. Of those who have pleaded guilty, eight have pleaded guilty to felony Indictments or Informations; the remainder have pleaded guilty to misdemeanor Complaints or Informations. Many of those who have pleaded guilty have been sentenced, but several await sentencing.

Igein‘s co-defendant, Ayinde, was convicted on seven of eight counts during a four-week trial that ended in April. Ayinde is expected to be sentenced within the next several weeks.

According to the Indictment against Igein and Ayinde, they ran the storefront under the names “Power Electronics” and earlier as “P&C Business Center” as well as other names. In reality, the business produced and sold personal identification documents, employment identification documents, pay stubs, letters verifying purported employment and income, Internal Revenue Service Forms W-2, tax returns, bank statements, utility bills, leases, rent receipts and academic records.

The “Section 8 Housing Program” and similar programs are administered and funded by the HUD. Four Essex County apartment complexes that participate in the Section 8 Housing Program are listed in the Indictments, Informations and Complaints: Garden Spires apartment complex, located at 175/195 First St., Newark; Corinthian Towers, located at 67 South Munn Ave., East Orange; Zion Towers, located at 515 Elizabeth Ave., Newark; and Essex Plaza II, whose management office is located at 15-31 Pennington St., Newark and whose apartments are located in several nearby buildings.

Under the Section 8 Housing Program, very-low-income and low-income individuals and families rent privately owned rental housing; HUD then makes assistance payments to the private owners who lease their rental units to the Section 8 participants. The amount of the rental subsidy from HUD is calculated based on, among other factors, the Section 8 participant’s total family income.

Section 8 participants are required to periodically provide information to landlords about, among other things, their total household income. As part of this “certification process,” Section 8 participants are required to supply their landlords with documentary proof of income, such as pay stubs, Internal Revenue Service Forms W-2 and/or tax returns. This verification is required to ensure that only financially eligible individuals and families obtain Section 8 benefits.

According to the Indictments, Informations and Complaints, the Section 8 housing recipients obtained all or part of their rental subsidies by making false and fraudulent statements about their household income, by omitting relevant information about their household income, and/or by submitting false and fraudulent documents. Many of those arrested obtained the fraudulent documents for use in the housing certifications from Igein and Ayinde, according to admissions made in court.

According to the Complaint originally filed against Igein and Ayinde, dozens of Section 8 participants residing at the housing locations described above used documents created by Igein and Ayinde at Power Electronics to obtain housing subsidies. The Complaint also alleges that Igein and Ayinde completed employment verification forms claiming that the listed person worked for Power Electronics, and that these verifications were submitted to the offices of the housing locations in support of the Section 8 participants’ certifications for rental subsidies.

For example, at least 20 such Section 8 housing recipients submitted pay stubs, Forms W-2 and/or other documents purporting to show that these individuals had worked for Power Electronics. Typically, the documents claimed that the Section 8 participant was employed part-time at the rate of about $5 per hour, earning about $5,000 per year. A check of IRS files, however, revealed that the documents were phony.

Following the sentencing, Judge Bassler continued bail for Igein, which includes an order of home detention, pending a voluntary surrender on a date to be determined by the Bureau of Prisons.

mortgage fraud